5 Key FinOps Challenges That Undercut Cloud Cost Savings

The good news is that these common FinOps challenges are easy enough to overcome. Here's how.

Christopher Tozzi, Technology analyst

April 27, 2023

5 Min Read
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In theory, FinOps — the practice of cost-optimizing cloud environments — sounds great. Who doesn't want to save money in the cloud?

In reality, though, FinOps initiatives can run into a variety of challenges that, if not properly managed, may undercut your business's investment in cloud cost optimization tools and processes. You need a plan for overcoming these challenges if you want FinOps to deliver value in practice and not just in theory.

Related: How FinOps Can Help Optimize Cloud Spending

With that goal in mind, let's explore five common FinOps challenges and how to work around them.

Challenge 1: Focusing on Small-Dollar FinOps Opportunities

The old saying about being penny-wise but pound-foolish applies to FinOps in the twenty-first century just as much as it applied when the term was coined in the seventeenth century.

To make the most of FinOps, you should focus FinOps processes and strategies on initiatives that yield the greatest cloud cost savings. Instead of trying to rightsize a single VM instance, for example — a practice that might save you just a few hundred dollars a year — a better strategy is to consider moving workloads from VMs to serverless compute platforms, which (if your workloads are a good fit for serverless) could dramatically reduce the cost of applications across the board.

Related: Beyond Rightsizing: When It Comes to Cloud Cost Optimization, Think Big

The point here is that FinOps should start with a focus on high-dollar savings opportunities, then work down from there to find smaller ways to save.

Challenge 2: Lack of Executive Buy-in

Business leaders like to save money. But they also tend to be risk-averse, and making major changes to cloud strategy in order to reduce costs may seem like a risky endeavor.

For that reason, some FinOps initiatives can run up against a lack of buy-in or ongoing support from executives, who might believe that the cost savings that FinOps will yield isn't worth the risk — or that money-saving changes to cloud environments need to be rolled out very slowly in order to mitigate disruption.

The best solution to this challenge is to demonstrate just how much money FinOps can save. If it's at least in the double-digits — which it probably is, unless your cloud is already exceptionally well-configured from a cost-savings perspective — managers are likelier to buy into FinOps.

Challenge 3: Lack of Practitioner Buy-in

On the other end of the spectrum, practitioners — meaning the engineers who actually create and manage cloud environments — may push back against FinOps. They might view it as a distraction from their primary jobs or, worse, as a process that creates additional work for them by requiring them to help monitor and report on cloud costs in addition to managing other aspects of cloud performance.

Businesses can manage this FinOps challenge by emphasizing that cost-optimized cloud environments are also optimized for overall cloud performance in most cases. If your workloads are efficient from a spending perspective, they are probably also efficient from a performance, availability, and even security perspective.

Viewed from this angle, FinOps becomes a practice that helps practitioners do their jobs better while also saving money for the business. It becomes a win-win for all stakeholders, rather than a negotiation between engineers who are focused on technical considerations and business leaders who care about finances.

Challenge 4: Lack of Technical Expertise From Finance Teams

Alongside business leaders and IT practitioners, a third key stakeholder group in FinOps is finance teams. Finance teams have the expertise necessary to evaluate how cloud cost optimization will contribute to the overall financial health of the business.

Unfortunately, the typical finance team lacks deep technical expertise. As a result, it may be difficult for finance people to understand how proposed cloud spending changes will impact technical operations. They might know that migrating some workloads from VMs to serverless computing will save money, for example, but not how it will change the way applications are developed, deployed, and maintained.

Related: 7 Cloud Finance Metrics to Track to Better Control Cloud Costs

Communication between finance and technical teams is key to solving this challenge. FinOps initiatives only work well when financial and technical considerations are addressed in tandem to develop plans that reduce costs without disrupting software development or IT operations.

Challenge 5: Lack of Continuous FinOps Monitoring

It can be tempting to treat FinOps as a one-and-done type of affair. In other words, businesses can approach FinOps as an activity they perform once to find cloud cost-saving opportunities, then complete once they've taken action to reduce spending.

The problem with this approach is that cloud environments and spending patterns are constantly changing at most businesses. To deliver real value, then, FinOps needs to become a continuous, ongoing process that is capable of surfacing cost-saving opportunities whenever they arise. Trying to optimize for cloud spending once every few years isn't enough.

Conclusion: Conquering FinOps Challenges

Getting the most from FinOps requires working around challenges that commonly get in the way of maximum cloud cost savings — such as not knowing where to focus FinOps initiatives, or struggling to get technical and non-technical teams to communicate with each other. The good news is that these challenges are easy enough to overcome, provided you approach them with the right mindset and strategy.

About the Author(s)

Christopher Tozzi

Technology analyst, Fixate.IO

Christopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.

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